Drawing on original survey data provided by recruitment consultancies December’s Report on Jobs indicated there was strong growth in placements for both permanent and temporary roles in December – with temporary billings growing at the fastest rate in three months.

However, the availability of staff to fill permanent roles continues to fall, while the average starting salaries for people placed in permanent jobs continues to rise. Temp availability decreased sharply, with the latest reduction faster than that recorded in November.Temp pay meanwhile increased at the sharpest rate in three months. This strong pay growth can be underpinned by tight candidate availability.

The availability of candidates was an issue for many employers, with those looking for short-term roles in December in short supply. Around one-third of employers said availability was worse in December than in the preceding month.

Summary

The Regions

The fastest growth of permanent roles was indicated in South of England, while the slowest rise was signalled in the North. In contrast to the trend seen for permanent placements, the strongest growth of temp billings was signalled by Northern-based agencies, while the South posted the slowest expansion.

Public/Private Sector

Private sector demand for staff remained substantially stronger than that from the public sector in December. Private sector permanent staff posted the fastest increase overall.

Staff Categories

• Accounting/Financial was the most in-demand category for permanent staff ahead of IT & Computing and Secretarial/Clerical
• The slowest rise in demand was reported for Hotel & Catering workers
• Higher levels of demand were signalled for all monitored types of temporary/contract staff in December
• The joint-strongest rates of growth were reported for Nursing/Medical/Care and Blue Collar workers

Kevin Green, CEO at REC

“As we enter 2015 the jobs market continues its strong performance. Recruiters are helping an increasing number of businesses find new permanent employees, and skills shortages in most areas of the economy mean that competition for quality candidates is driving up starting salaries.

“Economic growth for 2015 looks sustainable, however the concern now is that political uncertainty could spook the market as we approach a general election. The prospect of increased government intervention in the labour market as promised by the Left, questions around Britain’s position in the EU which are being posed by the Right, and the potential for protracted negotiations around a hung parliament come May could affect business confidence and hence future hiring.”

Bernard Brown, Partner and Head of Business Services at KPMG

“Just when it seemed the UK’s economy had definitely turned a corner, a couple of warning shots have been fired across the bows of British business to suggest that everything is not quite ‘ship shape’. Jobs are still being offered, and are still sought after, but today’s figures show that permanent and temporary placements have eased in recent weeks. It may be down to holiday season, yet with these figures following the latest manufacturing output data which also revealed slower growth, it wouldn’t be surprising if the confidence expressed earlier in the year is reaching a peak.

“The problem is exacerbated by the fact that employers still cannot find staff with the right skill set. Their desperation to fill recruitment holes is leading to continued wage growth, which is creating a market that is both unsustainable and unrealistic. With vacancy growth reaching its highest since the survey began, I believe that the nervousness in the marketplace is more about the consequences of investing in the wrong people, than it is about spending money in an attempt to recruit the best talent. It’s a conundrum British business will have to solve quickly because if the job market stagnates the wider impact on performance will end up harming productivity.”